Managing Risks WhenIntroducing PM Best

Practicesto a Naïve Organization

Managing Risks WhenIntroducing PM Best

Practicesto a Naïve Organization

Bryan Berthot, MBAJohn Godzina

PMI-San Diego 2008 Conference16 May 2008

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AgendaAgenda Definitions Organizational Characteristics Precursors to Implementing PM Best Practices Risks Risk Mitigation Strategies Which PM Best Practices? Q & A

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Data SourcesData Sources Case studies of healthcare companies

– Clinical research hospital– Satellite office of Fortune 50 insurance giant– Healthcare software development firm– Specialty biotechnology company– Pharmaceutical spin-off– Privately-owned managed healthcare (MSO)

Business literature, including:– PMBOK®

– PM Network– CMMI®

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DefinitionsDefinitions The “naïve” organization is one that has not done formal

project management and must learn how to do so to survive, to grow, or to move to the next level of success

Organizations of all sizes and maturity levels struggle with implementing PM best practices

The naïve organization typically struggles with Capability Maturity Model® Integration (CMMI®) Level 1 capability in PM related process areas:– Integrated Project Management– Project Monitoring and Control– CMMI Project Planning– Quantitative Project Management

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Organizational CharacteristicsOrganizational Characteristics Organization is ready for a change

– Knowing that there’s a “better way” but unable to articulate it

– Struggling with “getting to market,” despite having good products

– Seeking long-term cost cutting strategies– Looking for a competitive advantage

PM champions exist at senior executive or technical manager level (i.e., top-down innovation)

Business unit leaders are resistant Non-IT managers have poor software & quantitative

skills

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Precursors to PM Best PracticesPrecursors to PM Best Practices An analogy: Similar to implementing a PMO, but on a smaller

scale (Anderson et al., 2007) You need to assess what the organization knows (and doesn’t

know) about PM– CMMI® SCAMPI appraisal (Crissis et al., 2006)

Establishing the authority of the project manager– Preferred reporting structure: Direct connection to senior

management (e.g., VP or CIO) rather than to business unit leader ensures top management support

– Provides for legitimate organizational authority as well as social credibility

Decision to use PM best practices must be driven by real organizational needs

Remedial efforts in general management practices may need to precede or be concurrent with PM best practices (Tracy, 2007)

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A Risk Management Process (RMP) ModelA Risk Management Process (RMP) Model

Phases

Risk Management Planning

Risk Identification Negative and Positive Events (i.e., Risks & Opportunities)

Qualitative Risk Analysis

Quantitative Risk Analysis Risk Efficiency

Risk Response Planning Risk Mitigation Plan Risk Ownership (i.e., Roles & Responsibilities) Systems Approach Template for Responding to Uncertainties

Risk Monitoring and Control Iterative Risk Review

Source: Derived from Chapman & Ward (2003) and PMI (2004).

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Risks for the Project ManagerRisks for the Project Manager Positive

– Taking the organization to new heights by driving process change

– Educating senior management on PM– Negotiating personal and project team incentives

Negative– Being the scapegoat for chronic organizational

problems– Taking on PM in your “spare time”– Underestimating the challenges of implementing PM– Managing projects without the appropriate resources:

Infrastructure, people, and tools– Overcoming the notion that PM is an “IT thing” – all

business units need to participate

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Risks for the OrganizationRisks for the Organization Positive

– Developing internal competencies– Choosing more risk efficient projects– Staying within project time, cost, & scope constraints

Negative– Implementing PM best practices without commitment

Senior management supportAppropriate skill sets among incumbentsResources: Time and money

– Fostering the death march project (Yourdon, 2004)– Growing inpatient

Short-term failures vs. long-term competenciesFrustration and short-term staff turnover

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The Best Strategy: Start Small… and Think BIG!The Best Strategy: Start Small… and Think BIG! Start with a small pilot project to maximize chances for

success Small projects are a training ground for larger ones – for

you and the company Small projects may have strategic importance that

transcends their size Establish a track record within a business unit so that

other managers come to you looking for solutions Try internal projects before attempting external ones Methods that may facilitate small projects

– Extreme programming (XP)– One-person projects

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Other Strategies to Maximize SuccessOther Strategies to Maximize Success Keep your project sponsor informed at all times Promote personal accountability among all participants Regardless of project size, use sound PM methodology

to train the organization on how PM should work Introduce the project constraints – time, cost, scope,

and quality – early on Identify project-specific landmines (i.e., risk analysis) Define, measure, and report success

– Dashboards and “project on a page” reports Avoid scope creep by formalizing change management Negotiate achievable incentives (personal & team)

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Reality Check TimeReality Check Time Reality: You may have to adjust your definition of

success!– A project may “fail” but the effort may be an

organizational triumph– Introducing PM best practices may lead to turnover– Expect progress in stages: None, better, best

practices– Project management will not work in all firms

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Which PM Best Practices?Which PM Best Practices? In an organization just learning about PM itself, it is

impossible to implement all best practices simultaneously

Be judicious to avoid overwhelming either the organization’s capabilities or its attention span

Start with infrastructure documents to guide managing projects and proceed to more complicated tasks such as quantitative risk analysis

The most difficult best practices to implement are those requiring:– Specialized quantitative skills– Large upfront expenditures

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A Short List of PM Best Practices (1 of 2)A Short List of PM Best Practices (1 of 2) Project charter

– Defines and legitimizes project Project kickoff meeting Forming the project team

– Assigning team roles & responsibilities Project scope document

– Starting point for managing change requests Project management plan (PMP)

– Communications plan– Risk management plan

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A Short List of PM Best Practices (2 of 2)A Short List of PM Best Practices (2 of 2) Formal signoff of critical documents

– Signature of project sponsor carries weight Project management software (e.g., MS Project)

– Work breakdown structure (WBS)– Decomposing tasks– Gantt chart

Monitoring & controlling projects– Project metrics– Project dashboards and “project on a page” reports

Lessons learned report

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Summary/ReviewSummary/Review Definitions Organizational Characteristics Precursors to Implementing PM Best Practices Risks Risk Mitigation Strategies Which PM Best Practices? Q & A

Questions or Comments?Questions or Comments?

Please feel free to contact us!

Bryan Berthot bberthot@ppmcinc.comJohn Godzina jgodzina@ppmcinc.com

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About UsAbout Us

Bryan Berthot John Godzina IS Project Manager at PPMC Chief Information Officer at PPMC

Member PMI, PMI-San Diego, and asapm Health Fusion provider portal co-creator

PT faculty, Univ. of Md. Univ. College Systems analysis & design at CSC

20 years experience in healthcare 14 years experience in IS healthcare

Expert in managed care software

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ReferencesReferences

Anderson, B., Henriksen, B., & Aarseth, W. (2007, April). Benchmarking of project management office establishment: Extracting best practices. Journal of Management in Engineering, 23(2), 97-104.

Baile, R. A. (2007, March). Top ten mistakes in content management implementation. Intercom, 54(3), 18-21.

Chapman, C., & Ward, S. (2003). Project risk management: Processes, techniques and insights (2nd ed.). West Sussex, GB: John Wiley & Sons.

Chrissis, M. B., Konrad, M., & Shrum, S. (2006). CMMI: Guidelines for process integration and product improvement (2nd ed.). Indianapolis, IN: Addison-Wesley Professional.

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References References

Fretty, P. (2005, November). Leaving the box. PM Network, 19(11), 36-43.

Kroll, K. (2007, July). Small projects, big results. PM Network, 21(7), 28-33.

Project Management Institute (PMI). (2004). A guide to the project management body of knowledge (PMBOK® guide) (3rd ed.). Newtown Square, PA: Author.

Tracy, S. (2007, April). Implementing a successful knowledge management solution. Scientific Computing, 24(5), 18-21.

Wheatley, M. (2007, July). Maturity matters. PM Network, 21(7), 49-53.

Yourdon, E. (2004). Death march (2nd Ed.). Upper Saddle River, NJ: Pearson Education, Inc.